Are you Overpaying for Car Insurance

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The majority of Americans feel that they are paying too much for car insurance according to a recent study by Forbes. It found that 58 percent of those surveyed believe that they are overpaying for auto coverage and 29 percent of the respondents have switched to another insurance carrier. Of those who believe they are paying too much, over 68 percent say that they have been researching car insurance quotes over the past year.
 
The number one reason that people switch from their car insurance company comes down to price. Over 58 percent said they switched purely to save money, and 19 percent said they wanted to get different coverage. But how much of a savings are we talking about? According to the Forbes survey, more than half of the respondents said that they would need to save at least $200 a year in order to consider switching insurance.
 
Another factor in considering a switch involves the skyrocketing cost of living. Nearly 47 percent of those surveyed said their car insurance premiums recently increased. Over 83 percent of drivers said they have shopped for new policies in the past two years and got quotes from at least two insurance companies.

Is it Time to Switch?

With that in mind, do you think you are paying too much for your car insurance? If so, the first thing to do is a bit of research regarding other insurance carriers. It is wise to get quotes from several different companies and compare apples to apples when it comes to the level of coverage. Remember that insurance quotes are a free service provided by companies that are eager to get your business.
 
As inflation takes more of your monthly paycheck, the time is right to consider paying less for car insurance and maybe even think about switching the car you drive. Certain makes and models of cars are cheaper to insure based on their records of safety and reliability. For instance, some of the least expensive vehicles to insure include the Subaru Outback and Forester, the Honda CR-V, and Ford Escape. All average under $1,400 per year. In the Forbes study, 37 percent said they would consider switching cars to save more on insurance.

Do You Have Too Much Coverage?

Believe it or not, one of the easiest ways to save money on car insurance is to check your policy. Sometimes, you might have coverage that you don't need. A typical place to save is on roadside assistance. Many drivers have AAA coverage as well as roadside assistance through their insurance carrier. You don't need both.
 
The value of your car also comes into play. If you are driving an older car, you may not need collision coverage or comprehensive coverage if your insurance company would only pay out very little to repair your car after an accident and after you have paid the deductible. Use our Lithia Motors Value Calculator to find out what your car is worth. It's important to review your car insurance policy each year to make sure you're not paying too much.
What Affects Your Rates?
A number of factors affect how much you are paying for car insurance and these change over time. Your gender and age can affect your rates in some states. It's all about accident statistics, and statistically speaking, younger women are less likely to be involved in car accidents and are less likely to drive recklessly than younger men. Older drivers who fall in the category of less risk pay less for their car insurance, though drivers over 70 years of age often have increased rates due to diminished sight, hearing, and motor skills.
 
Your marital status affects your rates as well. You are likely to see a drop in your insurance premium once you are married as you are seen as being more responsible to the carrier. Statistically, married drivers have fewer accidents. Your driving record is a major factor in how much you pay for insurance. If you have a history of speeding tickets or drive recklessly and have been involved in accidents, you'll pay more. Drivers with a clean driving record pay less. By the same token, the longer you have been driving without having an accident, the lower your premiums. The longer you go without having an insurance claim, the less you'll pay.
 
Your credit history and credit score can also affect your insurance premium. That's because insurance companies assess your eligibility and assign your rate based on a number of risk factors. If you pay your bills on time and don't incur a great deal of debt, you are seen as a better risk to insure. So, your credit history and payment history will be taken into account. The better risk you are, the lower your premium will be.
 
Where you live and where you park your car is another factor. If you live in a highly populated city, a number of things might drive your car insurance up including the fact that statistically, you are more likely to be involved in a traffic accident or have your vehicle stolen. In such a case, keeping your car in a locked garage might lower your premium. The same is true if you have an anti-theft car alarm. If you live in an area that is known for hurricanes or tornadoes, your chances of having damage to your car due to a natural disaster increases as does your premium.
 
The safety features on your car can lower what you pay in insurance. If you have a newer car that includes such driver assist safety features as blind-spot monitoring, lane-keep assist, automatic emergency braking with pedestrian assist, forward collision warning, even a backup camera, you are likely to get a savings for those features.

Common Cents
In the last ten years, car insurance rates have increased by over 50 percent according to the Bureau of Labor Statistics Consumer Price Index. But though rates continue to rise, you can still save money by checking your coverage every year. Your age, your risk factors, where you live, and even your credit score, will affect how much you can save. Compare your coverage options by looking into online quotes.
 
As of this writing, the top auto insurance companies (if you are not military) to compare quotes with are Progressive Insurance, State Farm, Liberty Mutual, and Geico as they allow you to bundle your savings and customize your discounts. We hope the information in this article will help you avoid overpaying for car insurance.